February 2003 Employment Situation

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

Total nonfarm payroll employment fell by 308,000 in February, while the unemployment rate was about unchanged at 5.8 percent, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. Job losses were widespread, with retail trade and services posting especially large declines.

Unemployment (Household Survey Data)

The unemployment rate was little changed in February, at 5.8 percent; the number of unemployed persons was 8.5 million. Since November 2001, the unemployment rate has ranged from 5.6 to 6.0 percent. The jobless rates for the major worker groups in February were: adult men (5.3 percent), adult women (5.0 percent), teenagers (17.1 percent), whites (5.0 percent), blacks or African Americans (10.5 percent), Asians (6.0 percent, not sea- sonally adjusted), and Hispanics or Latinos (7.7 percent). (See tables A-1, A-2, and A-3.)

In February, nearly 1.9 million persons had been unemployed for 27 weeks or more. They made up about 22 percent of all unemployed persons, compared with about 15 percent a year earlier. (See table A-9.)

Total Employment and the Labor Force (Household Survey Data)

Total employment in February was 137.4 million and the employment- population ratio was 62.4 percent. The civilian labor force was 145.9 million. The labor force participation rate--the proportion of the population age 16 and older who are either working or looking for work-- was 66.3 percent. (See table A-1.)

The number of persons working part time for economic reasons was 4.8 million in February. These persons indicated that they would like to work full time but worked part time because their hours had been cut back or they were unable to find a full-time job. (See table A-5.)

Persons Not in the Labor Force (Household Survey Data)

About 1.6 million persons (not seasonally adjusted) were marginally attached to the labor force in February. These people wanted and were available to work and had looked for a job sometime in the prior 12 months. They were not counted as unemployed, however, because they had not actively searched for work in the 4 weeks preceding the survey. The number of discouraged workers was 450,000 in February, somewhat higher than a year earlier. Discouraged workers, a subset of the marginally attached, were not currently looking for work specifically because they believed no jobs were available for them. (See table A-13.)

Industry Payroll Employment (Establishment Survey Data)

Total nonfarm payroll employment fell by 308,000 in February to 130.5 million, seasonally adjusted. Job losses were widespread in February, with the largest decreases in services and retail trade. Employment also fell sharply in construction and declines continued in manufacturing and in transportation and public utilities. (See table B-1.)

Services employment fell by 86,000 in February; despite this decline, the industry has added more than half a million jobs since January 2002. Employment in amusement and recreation and in hotels decreased by 21,000 and 17,000, respectively, in February. Business services lost 26,000 jobs over the month, with decreases in services to buildings and in miscellaneous business services. Employment in help supply services and computer and data processing services was essentially unchanged over the month. Health services employment also was little changed in February; the industry had added an average of 21,000 jobs a month during 2002.

Retail trade employment decreased by 92,000 in February. This was the third month in a row with a large swing in retail employment; eating and drinking places accounted for a large share of the change in each of these months. From a longer-term perspective, employment in eating and drinking places has been on a downward trend since July 2001. Apparel and accessory stores lost 15,000 jobs in February, while department stores gained 27,000, after seasonal adjustment. Employment in both industries generally has been trending down since mid-2001.

In February, transportation and public utilities lost 41,000 jobs. Since its peak 2 years ago, this industry has lost over half a million jobs. Much of this decline occurred in air transportation and in communi- cations, where employment decreased by 12,000 and 7,000, respectively, in February. In addition, the trucking industry lost 17,000 jobs over the month.

Employment in finance was little changed in February, despite continuing gains in mortgage banking. Low mortgage rates have driven employment growth in this industry. Since January 2001, mortgage bankers have increased employ- ment by 41 percent (122,000 jobs).

In the goods-producing sector, construction employment dropped by 48,000 in February, following an increase of 26,000 in January. Since April 2002, construction employment has held at about 6.5 million.

Employment in the manufacturing industry continued its downward trend. In February, 53,000 factory jobs were lost--about in line with the average monthly decline for the prior 6 months. Over the month, industrial machinery and electronics had the largest job losses (10,000 each), while fabricated metals employment declined by 9,000.

Weekly Hours (Establishment Survey Data)

The average workweek for production or nonsupervisory workers on private nonfarm payrolls declined by 0.2 hour in February to 34.1 hours, seasonally adjusted. This followed an increase of the same size in January. The manufacturing workweek held steady at 40.8 hours. Manufacturing overtime was up by 0.1 hour to 4.2 hours. (See table B-2.)

The index of aggregate weekly hours of production or nonsupervisory workers on private nonfarm payrolls fell by 1.0 percent in February to 147.0 (1982=100), seasonally adjusted. The manufacturing index fell by 0.8 percent to 90.3 over the month. (See table B-5.)

Hourly and Weekly Earnings (Establishment Survey Data)

Average hourly earnings of production or nonsupervisory workers on private nonfarm payrolls increased by 11 cents in February to $15.08, seasonally ad- justed. This followed a loss of 1 cent (as revised) in January. The average increase for the 2 months (5 cents) is in line with the average monthly gain (4 cents) for 2002. Average weekly earnings rose by 0.1 percent in February to $514.23. Over the year, average hourly earnings increased by 3.2 percent and average weekly earnings grew by 2.9 percent. (See table B-3.)

Upcoming Changes to National Nonfarm Payroll Data Series

NAICS conversion. The nonfarm payroll series, produced from the Current Employment Statistics (CES) program, will be converted from the 1987 Standard Industrial Classification (SIC) basis to the 2002 North American Industry Classification System (NAICS) basis with the June 6, 2003, release of May 2003 estimates. The NAICS conversion involves major definitional changes to many of the currently published SIC-based series. After the conversion to NAICS, SIC-based series will no longer be produced or published. Historical time series will be reconstructed as part of the NAICS conversion process. All published series will have a NAICS-based history extending back to at least January 1990. For total nonfarm and other high-level aggregates, NAICS history will begin in January 1939, the current starting date for these series. For more detailed series, the starting date will vary depending on the scope of the definitional changes between SIC and NAICS. The NAICS- based reconstruction effort will cover all CES published data types: all employees, women workers, production workers, average weekly hours, average hourly earnings, and derivative series (for example, indexes of aggregate weekly hours).

Completion of the CES sample redesign. June 6, 2003, also will mark the completion of the CES sample redesign phase-in. The redesign converts the CES from a quota-based sample to a probability-based sample. In June 2003, the services industries will be converted to the new sample design; all other private sector industries have already been converted. The final stage of sample redesign phase-in may result in level shifts for average weekly hours, average hourly earnings, production worker, and women worker series. New levels for these series are being recomputed from the NAICS-based probability sample.

Concurrent seasonal adjustment. Also beginning in June 2003, the CES program will convert to concurrent seasonal adjustment, which uses all available monthly estimates, including those for the current month, in developing seasonal factors. Currently, the CES program projects seasonal factors twice a year. With the introduction of concurrent seasonal adjustment, BLS will no longer publish seasonal factors for CES national estimates.

Change to federal government series. Beginning in June 2003, the CES series for federal government employment will be revised slightly in scope and definition due to a change in source data and estimation methods. The current national series is an end-of-month federal em- ployee count produced by the Office of Personnel Management, and it excludes some workers, mostly employees who work in Department of Defense-owned establishments such as military base commissaries. The CES national series will include these workers starting in June. Also, federal government employment will be estimated from a sample of federal establishments, will be benchmarked annually to counts from unemployment insurance tax records, and will reflect employee counts as of the pay period including the 12th of the month, consistent with other CES industry series. The historical time series for federal government employment will be revised to reflect these changes.

Further information on upcoming changes to CES data series is avail- able through the BLS public database on the Internet, via the CES homepage at http://www.bls.gov/ces/, or by calling 202-691-6555.